Macroeconomics › Section Q · Government budgets and fiscal policy › Topic Q.1
Government spending
The federal government spends more than $7 trillion a year, and state and local governments add trillions more. Knowing where that money goes, and how to measure it fairly over time, is the starting point for every argument about budgets and fiscal policy.
In this topic
- Three levels, one budget question
- Purchases and transfers
- Measuring spending fairly
- The federal budget in fiscal year 2026
- Where the federal money goes
- Worked example: reading the budget's shares
- Mandatory, discretionary and interest
- Long-run trends
- State and local spending
- Worked example: nominal growth versus share
- Common mistakes to avoid
- Key takeaways
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